Considering the fact that Walmart, the largest retailer on earth just delivered its highest-ever sales for the quarter or its crucial digital revenues are surging up by nearly 70 %, or that it was raising funds, exiting slow-growth markets, and seeking greener pasture, even though the Investors expressed their displeasure because they were having none of it.
However, the insides of Walmart, let everybody ( investors and rivals) know that this game is not yet over and that its omnichannel presence poses a tough competition to Amazon. Moreover, the odds are also in Walmart’s favor.
Walmart CFO, Brett Brigs deems that this is the time to play an even more aggressive offense. He believes that they are winning and they also intend to keep pushing the ball aggressively down the field. He also indirectly mentioned a planned 30 percent increase in capital expenditures this year of more than $14 billion, which will primarily be deployed in the U.S. to support growth and efficiency initiatives.
Walmart’s strategy is nearly identical to the Amazon playbook, except for 11,000 gigantic differences: Walmart’s global network of brick-and-mortar stores, which have become invaluable cogs in the modern omnichannel machine. Not only is Walmart investing more in pick-up and delivery, but it’s constantly adding other services — like vaccines, money transfers, and dental care — which bring in more customers, who more often than not end up buying something else.
While investors might be feeling impatient with the fact that Amazon has steadily grown over the past decade to be four times larger than Walmart, management at the self-titled “low-cost leader” is stressing that the retailer is on a multi-year journey of modernization. “Over the next few years, we expect Capex to be around 2.5 to 3 percent of sales,” Briggs said, noting that was only about half as costly as the company’s Supercenter rollout phase in the ’90s.
Briggs after pointing out to 4 percent top-line growth at a company that just did half a trillion in sales, believes that a year or so of transition, these investments should put us in a position for 4-plus percent sales growth and [even higher] operating income growth rates
As much as Walmart is hustling to leverage its store count advantage, where 90 percent of Americans live within 10 miles of a location, Amazon is equally committed to compressing delivery times to get goods to people’s homes sooner, while convincing more businesses to sell goods on its platform. To facilitate that strategy, Amazon announced this week that it is acquiring Australian eCommerce platform Selz, which specializes in helping small to mid-size businesses (SMBs) to bridge the digital divide by processing payments and selling more merchandise.